Handouts 1-2 (Nature of economics and Demand) Flashcards
Scarcity
Infinite wants finite resources
Positive statement
factual statement which can be measured
Normative statement
An opinion
Notional Demand
Desire for a good which you cannot afford
Market demand
The quantity of a good or service all consumers are willing and able to buy
Effective demand
The desire for a good or service which you are willing and able to afford
What is the law of demand
Price and the quantity demanded have an inverse relationship
Substitute good
Substitute goods or substitutes are at least two products that could be used for the same purpose by the same consumers.
Derived Demand
Demand of one product which is directly related to another
Composite Demand
When a good has more than one use and must be divided to manufacture other goods e.g. Milk
What is Macro economics
The study of an entire economy
What is Micro economics
The study of individual agents and markets
Ceteris Paribus
all things being equal
What are the 4 factors of production?
Capitol
Enterprise
Land
Labour
Give an example of an increase in Enterprise
An increase high skilled workers and investors
